Tuesday, July 4, 2017

Cuban entrepreneurs brace for President Trump's new Cuba policy

Nidialys Acosta handles the booking for a loose association of vintage
car owners who have banded together to offer transportation for visiting
dignitaries and other groups. Clients have included a New York business
delegation led by Gov. Andrew Cuomo and one of the founders of Airbnb.

But several groups recently canceled their reservations with
Nostalgicar. The first, a group of 10, canceled on the same day that
President Donald Trump announced his new Cuba policy in Miami, said Acosta.

"The previous administration's easing of restrictions on travel and
trade does not help the Cuban people — they only enrich the Cuban
regime," Trump said during his June 16 speech, which was reported by
official press on the island. His policy, said Trump, will "help the
Cuban people form businesses and pursue much better lives."

"In President Trump's speech, he said he wanted to help the private
sector but I am wondering in what way?" said Acosta. Some 20 drivers
depend on Nostalgicar bookings for their livelihood, she said, and a
group of mechanics also work at Garaje Nostalgicar, a garage run by her
husband that refurbishes classic cars.

The president's new policy is aimed at not only exerting pressure for
Cuba to improve its human rights record but also channeling American
expenditures and possible business deals away from the Cuban military
toward Cuba's nascent private sector.

The president is eliminating one category of travel to the island:
Individual people-to-people trips, or self-styled itineraries that were
supposed to help Cubans and Americans get to know each other better. And
that concerns some Cuban entrepreneurs who welcomed the surge in
American travelers after the Obama administration opened up travel and
trade last year.

Trump believes individual people-to-people travel is ripe for abuse by
Americans who just want to go to Cuba to sun on the beach or engage in
other tourist activities. The United States prohibits tourism to Cuba
but allows "purposeful" travel such as educational group tours, family
visits and humanitarian trips. To stop illegal tourism, it appears there
also will be stepped-up auditing of travelers. People-to-people travel
in organized groups remains intact under the new Trump policy.

Acosta said she didn't speak directly with the canceling groups because
the reservations came through the state-run San Cristóbal Travel Agency,
which is associated with the Office of the Historian of Havana and
specializes in historic tours. But she has her suspicions about why they
canceled.

"I think the Americans are afraid if they come here they may have
problems. This worries me a great deal. It could put the brakes on
things," said Acosta. "I hope Trump changes his ideas or has better
ones, but I am not too optimistic."

Some analysts say limiting transactions with the military by Americans
and U.S. businesses won't necessarily translate into help for the
private sector.

"Overall, there is likely to be a decrease in the number of travelers
and transactions, and I think that's going to hurt the private sector in
Cuba, which has been growing over the last many years largely as a
result of the increase in U.S. travelers," said Ted Piccone, a senior
fellow at Brookings Institute.

For Julia de la Rosa, who runs a bed and breakfast called La Rosa de
Ortega with her husband Silvio Ortega, the potential for fewer American
visitors is discouraging. For the past two decades, they have gradually
renovated an old mansion that was in ruins when they began, adding guest
rooms and struggling to find parts to get the swimming pool filter
running again.

When Airbnb, the peer-to-peer rental service, launched in Cuba in 2015,
the couple listed La Rosa de Ortega and saw the number of American
visitors climb. Since it entered the Cuban market, Airbnb says its Cuban
hosts have earned nearly $40 million and the booking agency has 22,000
listings in 70 towns and cities across Cuba.

The couple now rents out 10 rooms decorated with vintage furniture and
crisp, white bedding. Seventy-five percent of their guests are Americans.

"That's completely different from a few years ago, and individual
people-to-people is the category that most of my American guests use to
travel to Cuba," de la Rosa said.

"This absolutely will have an impact," she said. "When I read the points
in the [Trump] memorandum and came to the elimination of individual
people-to-people travel, my blood ran cold."

De la Rosa also said she sees the emphasis on U.S. travelers keeping
receipts and records of their trips to Cuba for five years as a tactic
of intimidation.

"Besides that, I'm afraid that those who listened to Trump's speech will
start to feel Cuba is an inhospitable place," she added. "Unfortunately,
I don't think the majority of people in the United States understand how
the Cuban population can be affected by these measures."

Because their house is located in La Vibora, a neighborhood on the
outskirts of Havana, and it's sometimes a bit hard for guests to get
around, she and her husband decided to start a rental car agency. They
bought 11 old cars that are in various stages of being repaired. Now she
says they may scale back their plans.

But de la Rosa said the new travel policy won't just have an impact on
her and her husband but also on their 17 employees and the private
sub-contractors she uses to do everything from carpentry work to washing
and pressing clothes for guests. "Cuentapropistas (the self-employed)
have created a network," she said. "We regularly seek out each other's
services to solve our problems."

Meanwhile, the long days of summer have been a slow time at Finca Los
Colorados, a restaurant and five-room bed and breakfast that sits above
Rancho Luna Beach outside Cienfuegos. Proprietor José Piñeiro Guardiola
said he recently noticed that 50 people viewed his casa particular (a
private Cuban accommodation) on Airbnb one day, but not one of those
viewings converted into a reservation. "I watched the Celestyal cruise
ship go by recently, and it didn't seem very full to me," he added.

Nonetheless, Piñeiro said he supports Trump's new Cuba policy. "I like
it," he said in a telephone interview. "He gives instructions, a road
map, on how Cuba can have a better relationship with the United States.
I think Trump is an intelligent man. As a businessman, he knows what he
is doing."

He said he doesn't believe his business will be impacted much by the new
policy because the Americans he generally hosts are on small cultural or
educational trips and aren't individual travelers. Piñeiro said he can
accommodate groups of up to five people.

But Phil Peters, a consultant and president of the Cuba Research Center,
said most casa particulares are small and won't be able to handle group
travel. "It's harder if you have 20 people and need to run a scheduled
program. You can't have a tour bus stop at 10 different locations to
pick up group members. It's a little impractical," he said.

The exceptions, he said, are tourist towns like Trinidad or Viñales
where it seems like almost every other house is a casa particular. The
three state-run hotels in Viñales, a small rural town near dramatic rock
formations and caves, have a combined total of 193 rooms, while there
are 1,107 private bed-and-breakfasts, many that have two or three rooms.

Walter Sedovic is a New York architect who has visited Cuba in a group
and also as an individual people-to-people traveler.

"I think the whole thing is disconcerting — for our country to be
shutting doors, especially after opening them after almost 60 years of
isolation. The fear is when they start something like this [the Trump
policy], the first step is not the last step." He said his own
experience with people-to-people travel is that such "exchanges are
healthy, fruitful and mutually beneficial."

Sedovic, whose interest is heritage buildings and preservation, said
both times he went to the island he met with Cubans involved in the
stewardship of heritage buildings and sites. On his group trip, Sedovic
said, he was "principally bused around." But when he visited Cienfuegos
and Trinidad last September as an individual traveler, he stayed at
private homes, and walked, biked and took private cabs.

"I feel bad about this [Trump's new Cuba policy]. I've traveled plenty,
and I've seen that politics and people are almost always two different
things," said Sedovic.

Sandra Levinson, executive director of The Center for Cuba Studies,
which is based in New York and has sponsored educational travel to Cuba
since 1973, said the potential impact of the new policy on private Cuban
restaurants, casas particularles, private cab drivers and other service
businesses will be felt in Miami and other Cuban-American communities, too.

"Millions are being spent by Cuban Americans who are helping their
families in Cuba start their businesses by providing them with the
necessary equipment for their startups — everything from
bought-in-the-U.S. blenders, ice cream makers, coffee pots, dinnerware,
air conditioners, TV sets, leather upholstery for cars, computers, cell
phones, sound systems, bedding, shower curtains and more," she said.

"The issue shouldn't be about supporting the private sector; it should
be about helping the Cuban people," said Andy Gómez, a Cuba scholar who
lives in Coral Gables. "This [new policy] will hurt the Cuban people —
no doubt about it. The bottom line is that for the past 60 years
U.S.-Cuba relations have become a sport and there are two teams, one
that wins and one that loses. But the biggest losers are always the
people in Cuba."